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Guatemala Withdraws from Petrocaribe Oil Alliance

November 04, 2013 10:41 PM

Reuters

FILE - Under a portrait of the late Hugo Chavez, Venezuela's President Nicolas Maduro, fourth from right, and Nicaragua's President Daniel Ortega, third from right, preside over 8th Petrocaribe Summit in Managua, Nicaragua, June 29, 2013.

GUATEMALA CITY —
Guatemala has withdrawn from the Venezuelan-led Petrocaribe oil alliance after the Central American nation failed to negotiate favorable rates for purchases and financing, a vice-presidential spokesperson said on Monday.

Guatemala joined the 18-member group in May, seeking an interest rate of below 2 percent on its deferred purchases of Venezuelan oil.

“We did not get the benefits that the country hoped for,” spokeswoman Karen Cardona said.
Venezuela's late president, Hugo Chavez, founded Petrocaribe in 2005 as an alliance that allows its member states to buy oil from Venezuela at favorable rates and with easy payment plans.

Venezuela, suffering from cash flow constraints and product shortages, has apparently been trying to make changes to the Petrocaribe financing arrangements.

Venezuelan foreign minister Elias Jaua said in Mexico on Monday that “we are advancing toward a new phase with Petrocaribe from an energy alliance to a productive energy alliance,” without giving further details.

Venezuela has for months suffered from nagging product shortages, in part as a result of a lack of hard currency to import consumer goods.

Separately, Honduras, which rejoined the alliance in May, has been waiting since August for a fuel shipment from Venezuela that has been delayed due to “technical problems” in Venezuela's refineries, according to officials.